CHAX is a funds transfer software developed by CHAX Software, Inc. (formerly CHAX, Inc.). CHAX is a standalone software product that allows the user to create a pre-authorized check for deposit using their client’s checking account information.
CHAX is as easy as:
- Receive your customer’s check information by phone, fax, or web
- Enter the check information into the CHAX software
- Print your check for same day deposit
MultiCHAX and CHAX are two different software products for different purposes:
- MultiCHAX is a check printing and writing software add-on for accounting programs to allow users to print your own checks on blank check stock to be used for payroll and accounts payable. Also works on pre-printed checks to add signatures and logos.
- CHAX is a standalone funds transfer system which allows users to accept and print pre-authorized checks from their customers to be deposited the same day.
The CHAX user’s customer will typically be sending a payment for a product or service, either by credit card or by check. Using CHAX benefits the user and customer in multiple ways:
- There are no transaction fees for using CHAX. The user avoids expensive credit card transaction fees, and can easily pay for itself with savings within a few months.
- Check customers avoid having to send checks and pay for postage or overnight delivery.
- Sending checks by phone or fax is more secure than mailing. The checks will never get lost in the mail.
Read more on the CHAX benefits
- CHAX checks are safer than regular checks. When you send a CHAX check you are providing no more information than if you mailed the check. Checks can be intercepted or lost in the mail. CHAX are sent by fax and thus you have positive, instant confirmation of their receipt. CHAX checks look different from regular checks and so cannot be easily cashed but must be deposited into a bank account, leaving an audit trail.
- You control your money. You control the float. You can send the CHAX checks on the day you wish to release the funds. You no longer have to build in extra time to cover delays.
- You can eliminate the need to use expensive overnight delivery service when you have to get a check delivered in a hurry.
- If you have merchandise on hold for receipt of funds, you can get it shipped the same day.
- You can avoid COD charges and the problems of having to leave the check ready and waiting for the trucker.
- Using CHAX checks instead of credit cards will not tie up your credit card available credit and will avoid the hassles of getting reimbursed for business purchases.
- Keep your accounting simple. CHAX checks are generated by you just like regular checks (you create a regular check, fax it, and retain the original for your records). If you use CHAX instead of your credit card, you won’t have to analyze and allocate your credit card account statement for tax and audit purposes.
ACH (Automated Clearing House)
The Automated Clearing House or ACH is a network that is a secure and efficient nationwide electronic funds transfer system that connects all U.S. Banks. The ACH networks act as a central hub for all EFT (Electronic Funds Transfer) transactions thoughout the U.S. ACH transactions are processed in large batches for both credit and debit transactions. The ACH network is ruled and governed by the Federal Reserve and NACHA (National Automated Clearing House Association).
ACH transactions include:
- Direct Deposit of payroll
- Social Security
- Tax refunds
- Direct Payment of consumer bills such as mortgages, loans, utility bills, and insurance premiums
- Business-to-Business payments
- E-commerce payments
- Federal, state and local tax payments
It must be clear that it is very important to receive pre-authorization from the account holder before completing an ACH transaction, in accordance with the rules and regulations of ACH. Financial institutions will not be able to simply issue the transactions without this prior authorization.
ACH Terms and Definitions
Any individual, corporation or other entity that initiates entries into the Automated Clearing House Network
Originating Depository Financial Institution (ODFI)
A participating financial institution that originates ACH entries at the request of and by (ODFI) agreement with its customers. ODFI’s must abide by the provisions of the NACHA Operating Rules and Guidelines
Receiving Depository Financial Institution
Any financial institution qualified to receive ACH entries that agree to abide by the NACHA Operating Rules and Guidelines
An individual, corporation or other entity who has authorized an originator to initiate a credit or debit entry to a transaction account held at an RDFI.
The answer is yes. The pre-authorized or “Draft Checks” are legal under the Uniform Commercial Code.
Uniform Commercial Code
Section 1-201 (39) Signed includes any symbol executed or adopted by a party with present intention to authenticate a writing…
Title 3 – Commercial Paper:
Section 3-401 (1) Any writing to be a negotiable instrument within this title must (a) be signed by the maker or drawer; …
Section 3-401 (2) A signature is made by the use of any name, including any trade or assumed name, upon an instrument, or by word or mark used in lieu of a written signature.
Section 3-403 (1) A signature may be made by an authorized agent or other representative… No particular form of appointment is necessary to establish such authority…
The default username for the CHAX® software is Admin, and the password is Masteradmin (Note: The user name and password are not case sensitive).
Each check sheet has three different portions, and each portion is perforated. The top portion would be the confirmation of the check, that the merchant would send back to their customer. The middle portion is the actual check, the merchant would take to the bank to deposit. The lower portion would be the file copy of the confirmation that the merchant would keep for their own records (For a display of a sample check click here).
After you have initially logged into the system, click on the payee button in your toolbar. Next, click on the ‘Add New’ button. This will now take you to the field where you can enter your company’s information starting with your company’s name. Then tab and enter your company’s address, and tab once more to enter the company phone number. After, you have entered your company’s phone number, click on the ‘Complete Update/Add’ button. You will now see your company added to the list of company’s available to be selected as a payee. Now, click on exit, and you will see a program box appear, that states: “Do you want to make (your company) the new default payee”. Select yes to make the company just entered the default payee otherwise select no. You will now be taken back to the “Enter Check Information” screen.
To add a new user, password and/or select rights for a new/existing user, log into the CHAX® software, which will then take you to the “Enter Check Information” screen. Then click on the ‘Maintain Password’ button on the toolbar. This will now take you to the ‘Security Permissions’ screen. Now, click on the ‘Add New User’ button. Next, enter the User ID for the new user, then hit tab and enter the new users name. Once you have done this, click on the ‘Continue’ button. Now, enter the users password and then hit tab and re-enter the password. To the right of that field you will you see the ‘Permission List’. Click in each box, you would like the user to have the rights to. If, you select “Supervisory” the user will have the all rights to the software and you will not need to select each of the other boxes.
If, you would like to change the password for an existing user, click on the ‘Maintain Password’ button on the toolbar. This will now take you to the ‘Security Permissions’ screen. Left click on the user from the list of users under the ‘Supervisory Function’ field. Then, click on the ‘Update User’ button. Now enter the new password for the user and then hit tab and re-enter the password. Next, click on the ‘Complete Update’ button and you have now changed the password for that user.
Before, you enter the check information for a check or select a payer, you will notice that a dialog box will appear stating that you must enter a check number before you are able to enter check information or select a payer. This is a new feature for the software, created to add additional security to the software. Due, to the fact, that users reported incidents that they forgot to enter a check number for a check and in turn had their checks returned from the bank.
The names entry is case sensitive. Enter starting with capital letter.
This varies, depending on how often you use the software. However, we recommend at least once a week, especially before you make any significant system or network changes.